Collateral

Supply and withdraw the asset that backs your pledge in a pasanaku.

Goal

Hold enough free collateral to create or join, and know what you can withdraw while locked in a pool.

Steps

1. Open Collateral in the app (or follow the prompt from create/join).
2. Supply — approve the asset if needed, then deposit. The contract places it in the ERC-4626 vault and credits you with shares.
3. Check balances: total, in use (locked in pools), and free (available to pledge or withdraw).
4. Withdraw only from free collateral — locked shares stay until the pool ends or you leave a pending/stale pool.

What the protocol does

You do not hold vault shares in your wallet through this path. The Pasanaku contract owns the vault shares and tracks how many are free, locked to a pool, or held in a pool reserve. Supply moves underlying into the vault; withdraw burns free shares for underlying assets.

Free vs locked

Kind	You can	Used for
Free	Withdraw or pledge	Create, join, top-ups
Locked	Not withdraw until unlock	Pledge in a pending or active pool
Reserve	Not yours personally	Pool penalties / shortfall cover

When you create or join, the protocol locks a pledge: principal equal to per-round amount × participant count, plus 1% headroom for a miss penalty.

Example (six-participant circle, 100 USDC per round):

principal = 100 × 6 = 600 USDC
penalty headroom = 600 × 1% = 6 USDC
pledge ≈ 606 USDC of vault share value

Statuses / outcomes

Action	Outcome
Supply	Free collateral increases
Create / join	Free → locked for that pool
Leave after stale	Locked → free again
Pool ends	Locked principal returned (subject to settlement); free again

Common mistakes

• Creating or joining when free collateral is below the pledge — the transaction reverts.
• Trying to withdraw the full balance while shares are locked in an active pool.
• Ignoring vault risk — share value can fall; see Risks and fees.

See also

• Create and join
• Misses and stale pools
• Implementation: Collateral shares, Pledge and join